BUS 401 Principles of Finance questions and answers solution docs 2020

21.) Which business development increases cash?
Decrease in long term liabilities
Decrease in accounts receivable 
Increase in PP&E
Increase in inventory

22.) Which statement shows a company’s cost of revenues?
Statement of cash flows
Balance sheet
Income statement 

23.) For which of these ratios would a lower value indicate lower risk to the firm’s operations?
Current ratio
Debt ratio
Quick ratio

24.) What is Moody’s formula for liquidity?
Cash & marketable securities/ total assets
Total assets – goodwill - intangibles / total debt
Net after – tax income before X-items + depreciation – dividends/ total debt + 8 X rental expense

25.) In trend statements, each account is re-expressed as a multiple of what?
That year’s revenue
The benchmark year’s balance
That year’s total assets 

26.) which calculation measures the profitability of a company’s operations?
Gross profit minus indirect costs
EBIT minus financing costs and taxes
Revenue minus COGS